Skip to Content

Pros and Cons of Investing in a New Home for a Poquoson Rental Property

Poquoson Rental Property with a “For Rent” Sign in the Front YardIn the process of purchasing single-family rental properties in Poquoson, there are both pros and cons to choosing a newly built home. Although brand-new properties have benefits like additional customization, higher energy efficiency, and less maintenance in the first few years, all of these things may cost you more up front. This is often true not only because upgrades aren’t cheap, but because there is usually very little room to negotiate on price. No matter which property you choose, it’s important to weigh all of the pros and cons carefully to ensure that you’re getting a solid return on your investment.

In many ways, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction offers investors the chance to buy and immediately rent out a clean, attractive rental home with a range of attractive upgrades. Because the upgrades are included in the purchase price, there will be little if any out-of-pocket repair and improvement costs to get the property ready for your first tenant.

If the new home is immediately ready for move in, rental income can begin right away. Included in the price of a new home are also a range of upgrades that can help investors customize the rental home to appeal to a particular renter demographic. For example, a new home that has been upgraded with smart technologies will likely appeal more to a Millennial renter than one that has not.

Tenant appeal is an important factor in any successful rental property, and new homes offer renters something older properties cannot: the chance to be the first and only tenant who has lived in the home. A new property also offers renters significant utility savings, due to the fact that newer homes tend to have higher energy efficiency throughout. Renters looking to stay long-term may be particularly attracted by these features, and by the prospect of enjoying a modern, low-maintenance, energy-efficient home for many years to come.

While these are all compelling reasons to invest in a new home for your next rental property, there are a number of downsides to consider as well. For example, it’s important to remember that not all builders are equal and that some may use cheap materials or try to cut corners to save money.

Buying shoddy construction can lead to endless haggling with the builder to try and get things done correctly, as well as higher repair and maintenance costs if you can’t get them to do the work the right way. Another item on the con side of things is the often-limited number of options available. Although customization is possible to a degree, it is more often a matter of choosing between a very limited set of wall colors, countertop styles, and so on, or risk driving the purchase price up even higher.

Finally, if you are an investor who likes a good bargain, buying a new home may not be the right option for you. This is because the price of new construction isn’t always determined by the market or a previous owner, often leaving room for negotiation.

When you’re buying from a builder, they may not be as open to negotiation because lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encouraging future buyers to try and talk them down as well. Of course, this situation may change depending on the circumstances, and it’s always a good idea to ask for any available discounts or other financial incentives.

It is important to weigh all the pros and cons before choosing to buy a new home to use as a rental property in Poquoson. But with so much to consider, it can be hard to know whether a new property is the right investment for your market and demographics.

You need detailed market information, like the kind offered to all property owners working with Real Property Management Dominion. We perform market assessments for all potential rental properties, ensuring that owners who partner with us have the tools and information they need to make the best possible investment decisions. For more information, contact us online or give us a call at 757-395-4274.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details